Jobs boom but young are left bust

By Kasia Banas, Consultant

Britain is seeing unprecedented jobs and employment growth despite an ageing population and increased health problems, a new report has shown.

Resolution Foundation started the year with launch of ‘Setting the record straight’ – its latest report exploring how record employment levels have changed the country since the financial crisis.

At the event in their Westminster headquarters, Senior Economic Analyst Stephen Clarke presented the findings on the post-crisis job growth and the current record employment rate of 75.7%, taking place against a demographic headwind of an ageing society with increased health issues.

The good news is that the rising employment has resulted in falling ‘employment inequality’ with two-thirds of jobs going to households in the bottom half of earnings. Single parents, people with ill-health or a disability, and people with low qualifications have also done particularly well. This does not mean that all jobs growth has just been in low-paid jobs however and, in fact, higher-paid occupations have expanded faster.

Young hit hard by insecurity

However, one group that has not fully benefited from the growth of higher-paying occupations are young people. The share of 18-29 year olds in lower-paying job roles has expanded over the last decade, while it has fallen for the rest of the workforce. Young people have also been amongst those most affected by another post-crisis trend – an increase in atypical and insecure roles such as self-employment, zero-hours contracts and agency work.

The stats will come as further unwelcome news for young people struggling to make a living and get on the housing ladder, especially with the average first-time buyer deposit in London at an eye-watering £114,952 – 27% of the purchase price and a three-fold increase from £38,335 in 2008.

Another positive is the strong performance of typically low employment areas such as South Yorkshire and Merseyside, which have had the highest growth rates. However, while overall geographic ‘employment inequality’ is falling, the Foundation warns that some areas outside of big cities have seen less benefit from Britain’s jobs boom.

Minister for Employment Alok Sharma welcomed the foundation’s work and assured the audience the that government’s three employment priorities are focus on quality new jobs; growth of employment for disadvantaged groups; and support for career progression to escape from low pay. He also expressed his confidence in technological change and the growth of AI having a positive impact on the labour market in the future.

Other speakers addressed the issues of mandatory gender pay gap reporting, need for employment rights to reflect the modern workplaces, and Britain’s continuing shift towards service sectors, which disproportionately benefits urban areas.

While the report points to a lot of positive developments in Britain’s labour market since the crisis, they have been overshadowed by ‘the deepest pay squeeze in over 200 years’, with Britain’s real average earnings £470 lower than they were a decade ago.

Policy makers now have the difficult task of tackling the new challenges that have developed alongside the jobs boom, in particular the poor pay and productivity performance of younger workers, the relatively poor performance of rural areas and smaller urban areas, and the endurance of atypical work. Good luck to them.